Question
The following is information for Palmer Company. Year 3 Year 2 Year 1 Cost of goods sold $ 608,825 $ 391,650 $ 356,300 Ending inventory
The following is information for Palmer Company.
| Year 3 | Year 2 | Year 1 | |
|---|---|---|---|
| Cost of goods sold | $ 608,825 | $ 391,650 | $ 356,300 |
| Ending inventory | 99,900 | 90,250 | 95,000 |
Use the above information to compute inventory turnover for Year 3 and Year 2, and its days' sales in inventory at December 31, Year 3 and Year 2. From Year 2 to Year 3, did Palmer improve its (a) inventory turnover and (b) days' sales in inventory?
| Use the above information to compute inventory turnover for Year 2, and its days' sales in inventory at December 31, Year 2. | ||||||
| Numerator | / | Denominator | = | Ratio | ||
| Inventory turnover | 0 | |||||
| Days' sales in inventory | 0 | |||||
| Use the above information to compute inventory turnover for Year 3, and its days' sales in inventory at December 31, Year 3. | ||||||
| Numerator | / | Denominator | = | Ratio | ||
| Inventory turnover | 0 | |||||
| Days' sales in inventory | 0 | |||||
| Did Palmer improve its (a) inventory turnover from Year 2 to Year 3 and (b) days' sales in inventory from Year 2 to Year 3? | ||||||
| (a) Did Palmer improve its inventory turnover from Year 2 to Year 3? | ||||||
| (b) Did Palmer improve its days' sales in inventory from Year 2 to Year 3? | ||||||
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CPA Comprehensive Exam Review Auditing And Attestation
Authors: Nathan M. Bisk
43rd Edition
088128095X, 978-0881280951
